y for the carriage of that of his
fellow-traveler.

The zone tariff was introduced on the state railways of Hungary by M.
Barosz, the Hungarian Minister of Commerce, on the 1st of August, 1889.
The adoption of the new tariff was ridiculed and condemned as visionary
by road experts, who even went so far as to prove to the satisfaction of
practical railroad men that the innovation was destined to be a failure.
For a month or two it almost seemed as if their prediction might be
fulfilled, the number of passengers carried remaining behind the number
carried during the corresponding period of previous years. But soon the
reaction set in. The month of November, 1889, already witnessed an
increase in the number of passengers as well as in receipts over the
same month of the year previous. The result of the first year's trial
demonstrated the wisdom of the "innovation." The number of passengers
carried, which had been only 5,186,227 in 1888-89, rose to 13,060,751 in
1889-90, and the total receipts for passengers and baggage rose from
9,138,715 florins to 11,186,321 florins, a gain of 2,047,606 florins, or
22 per cent., during the first year. There is a continued increase both
in the number of passengers and in receipts, and the success of the
system must be pronounced phenomenal. The railroad experts of Europe,
who had predicted the signal failure of the zone system, now that the
unexpected has happened, are trying to discover the particular favorable
conditions which made the success of the system possible in Hungary. It
will probably be a decade, or even two, before the railroad experts of
both hemispheres will be entirely reconciled to this new application of
the old principle that a reduction in the price of a commodity increases
the demand for it.

It is strange, indeed, that intelligent men should be so slow in
recognizing an economic principle for which both history and daily
experience furnish an unlimited number of illustrations. The post-office
receipts everywhere have increased with a reduction in postage. The
Government telegraph in England did not become self-supporting until
Parliament made a sweeping reduction in its rates. The revenue from the
Brooklyn bridge never paid a fair interest on the capital expended in
its construction until its tolls were cut down. Were it necessary,
hundreds of other examples could be added to these.

Hungary has also applied the zone system to its freight traffic. Three
zones are